Source: China Fund News

On March 26, BYD, the “big brother” of new energy vehicles, handed over the 2023 “Report Card”.

For the first time, BYD ranked among the top ten car sellers in the world. Last year, revenue surpassed 600 billion yuan, and net profit to mother also exceeded 30 billion yuan. What is most interesting is that in last year's price war, BYD's profitability did not decline but increased, and the gross margin of cars exceeded 23%, leaving Tesla far behind.

In addition, BYD's board of directors approved a profit distribution plan and plans to distribute a cash dividend of 30.96 yuan (tax included) for every 10 shares, with a total cash dividend of about 9.012 billion yuan.

On the same day that the annual report was revealed, BYD once again made a big move to launch the first A0 class pure electric SUV equipped with the e-platform 3.0 — the yuan up, to the market, and the minimum sales price of this model fell directly within 100,000 yuan.

The cost of bicycles has dropped significantly

According to the annual report data, BYD achieved operating income of 602,315 billion yuan for the full year of 2023, an increase of 42% over the previous year, and realized net profit of 30.4 billion yuan, an increase of 81% over the previous year.

In 2023, BYD sold 3,024,000 vehicles, an increase of 62% over the previous year. Not only did it rank first in the world's NEV sales, but it also ranked among the top ten in global automobile sales for the first time, leaving Suzuki behind.

As we all know, in the past year, the car rim price war lowered the gross profit margins of many car companies, but the gross margin of BYD Auto bucked the trend and increased.

In terms of automobile gross margin, BYD was 23.02% for the full year of 2023, while the company's indicator was 20.39% in 2022. In contrast, Tesla's gross margin on car sales fell from 26.2% in 2022 to 17% in 2023. In terms of profitability, Tesla has been completely left behind by BYD.

However, the effects of the price war were also reflected in BYD. BYD's revenue for automobiles and related products in 2023 was 483.453 billion yuan, corresponding to annual vehicle sales of 3,024,000 units.

Based on this calculation, its bicycle revenue (vehicle revenue/sales volume) was 159,900 yuan, compared to 173,800 yuan in 2022. Its bicycle revenue in 2023 fell by about 8% compared to 2022.

However, the advantage of scale reduced its cost even more drastically. Last year, the cost of BYD cars and related products was 372.557 billion yuan. Based on this calculation, BYD's bike cost in 2023 is about 123,300 yuan. In 2022, this figure was about 138,300 yuan. BYD's bike costs in 2023 will be reduced by about 10.99% compared to 2022.

It can be seen from this that despite the decline in the price of BYD bikes, their profits remained stable, supported by the advantage of scale. It is worth noting that on March 25, BYD completed the launch of its 7 millionth NEV.

According to Huaan Securities estimates, in recent years, along with the steady increase in car sales, BYD's bicycle net profit has shown an upward trend. From 2020 to 2021, when the company's quarterly sales volume hovered between 100,000 and 300,000 vehicles, the net profit of bicycles fluctuated positively and negatively. After the second quarter of 2022, BYD's sales volume exceeded 300,000 units, and its net bicycle profit began to jump into an upward channel.

Comprehensive impact on the high-end market

More importantly, BYD will also fully launch an impact on the high-end market in 2023.

At present, BYD has built a multi-brand matrix composed of the BYD brand, Tense, Yiming, and Equation Bao, covering needs from household to luxury, from popular to personalized, and has quickly established a leading position in various market segments.

Among these, Tension D9 became the top seller in all categories of MPV markets in China last year. Equation Bao, on the other hand, is a professional personality brand owned by BYD. The first model, Equation Panbao 5, is positioned as a super hybrid hardcore SUV, filling the market between the admiration and momentum of BYD's high-end brands.

In addition, BYD's first million-class luxury car, the U8, achieved sales of 5,000 units in just 132 days. Another million-class supercar, the U9, was also released in February of this year.

In addition to this, going overseas is another highlight of BYD's performance. In 2023, BYD exported 242,000 passenger cars, an increase of 334% over the previous year. It covered more than 70 countries and regions and more than 400 cities around the world, and invested in the construction of factories in overseas regions such as Brazil, Thailand, and Hungary.

The agency expects that in 2024, with BYD's rapid growth in automobile sales, the scale effect will drive the company's vehicle manufacturing costs to continue to decrease.

Major new products released on the same day

At the same time as handing over the 2023 “report card”, BYD threw another “bombshell” into the market. On March 26, BYD's first A0 class pure electric SUV equipped with e-platform 3.0, was officially launched, the YuanUP.

Currently, one of the main players in the BYD Dynasty series is the Yuan PLUS model, which is also a popular model from BYD. According to data from the Passenger Federation, YuanPlus is second only to Tesla Model Y in the 2023 SUV sales list, with retail sales reaching 309,800 units throughout the year.

However, there has always been a shortage of popular SUV products in the A0 class market. The arrival of the BYD yuan increase may change this situation. According to BYD's plan, Yuan UP will focus on the A0 level market, explore the A00 level market, and form a “Gemini” partnership with Yuan PLUS, so that Yuan IP can cover different segments of the pan-A market.

In terms of price, a total of 3 models were launched for the new YuanUP car. The official guide price ranged from 96,800 yuan to 119,800 yuan, lowering the threshold for A-class cars to less than 100,000 yuan in one fell swoop.

After the Spring Festival, BYD set off a wave of “electricity is lower than fuel” in the market. On February 19, the BYD Qin PLUS DM-i Honor Edition and Destroyer 05 Honor Edition went on sale at a starting price of 79,800 yuan. Since then, various blockbuster models such as the Song Pro DM-i Honor Edition have also been launched on the market one after another.

According to Fangzheng Securities estimates, the total sales volume of BYD's Honor Edition models in 2023 was 2.653 million units, accounting for 87.7% of BYD's total sales.

Meanwhile, BYD's drastic price reduction also had obvious results. According to weekly data from a third-party platform from March 4 to March 10, BYD's weekly sales volume reached 51,000 units, up 26.6% month-on-month, and its NEV market share increased to 34.85%, achieving a sharp rise in sales for four consecutive weeks.
Among them, sales of the Qin series and Song series models reached 12,000 units and 13,000 units respectively. After the launch of the Honor model, the effect of boosting BYD's sales was remarkable. The industry expects that BYD's sales performance in the first and second quarters will continue to be impressive.

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